First in Detroit, then in Stockton, Calif., and now in New Jersey, judges and other top officials are challenging the widespread belief that public pensions are untouchable. Gov. Chris Christie of New Jersey delivered the latest blow on Tuesday, when he proposed to freeze that state’s public pension plans and move workers into new ones intended not to overwhelm future budgets or impose open-ended demands on taxpayers. The first crack came in Detroit, where a judge ruled that public pensions could, in fact, be reduced, at least in bankruptcy. Then, just a few weeks ago, an opinion by the bankruptcy...

In what will be a devastating blow to California public employee unions, U.S. Bankruptcy Judge Christopher Klein ruled in the Chapter 9 municipal bankruptcy of the City of Stockton that pensions managed by the California Public Employee Retirement System, known as CalPERS, can be cut in bankruptcy “like any other garden variety” unsecured debt. He rejected the unions’ argument that the world’s largest pension fund is an “arm of the state” and that public employee pensions are protected by federal and state laws. Stockton city employees and city council members, who are all CalPERS pension beneficiaries, received retirement benefit enhancements...

Desert Hot Springs, the resort town near Palm Springs, may become the first city since Detroit to seek bankruptcy protection from creditors ... Chapter 9, it would be the fourth California city since June last year to do so.

Thousands of Detroit streetlights are dark. Many more residents have fled. Donors are replacing ambulances that limped around for 200,000 miles. Millions in debt payments have been skipped. Is there really any doubt the city is broke? A judge starts exploring that question Wednesday in an unusual trial to determine whether Detroit indeed is eligible to scrub its books in the largest public bankruptcy in U.S. history. Unions and pension funds are claiming the city failed to negotiate in good faith before filing for Chapter 9 protection in July. …

...So $140 million is the cost of 3.3 miles of light rail in the city of Detroit, which by April was already well on its way to bankruptcy. In fairness, the project will mostly be privately funded. But why are federal taxpayers being put on the hook for even a single dime?...

Passengers on a Detroit bus were recently witness to a shocking no holds barred fight between the driver and a belligerent member of the public. According to one witness, the incident happened after the unnamed passenger lost her cool when her ticket got stuck in the machine as she attempted to transfer. The unruly passenger then started to argue with the driver, demanding her ticket back and even spat at the driver. That proved to be the final straw for the driver who, dressed in her white work shirt, got up from her seat and lunged at the passenger. Video...

Public labor unions took aim at Detroit's historic bankruptcy filing on Monday, asking a U.S. court to toss the city's bid for protection from its creditors because it is constitutionally flawed on both the state and federal levels. A union that represents public-sector workers even took the unusual step of arguing that Chapter 9 of the federal bankruptcy code, under which municipalities seek protection from their creditors, violates the U.S. Constitution. But as a midnight deadline for filing objections to the bankruptcy passed, Detroit's bondholders were conspicuously absent from the long list of unions, pension funds and individual creditors lining...

DETROIT (AP) — Individual creditors who fear losing their pensions and paying more for health care were among those who began filing objections on Monday to Detroit's request for bankruptcy protection, the largest municipal filing in U.S. history and a move aimed at wiping away billions of dollars in debt. Federal Judge Steven Rhodes set Monday as the eligibility objection deadline in the bankruptcy petition by Detroit emergency manager Kevyn Orr. Attorneys for creditors — including bond holders, insurers, banks, employee pension funds, individuals and companies that provided services — have until just before midnight to file objections electronically. City...

In the industrial midwest, the city government of Detroit went into bankruptcy in July. Out in California, the city governments of Stockton and San Bernardino entered bankruptcy proceedings in 2012. But the Detroit and California bankruptcies, like Tolstoy’s unhappy families, are not alike. They suffer from quite different ailments. You can see the difference by comparing their populations in the 1950 and 2010 censuses. In 1950, Detroit – then the nation’s fifth-largest city – had 1,849,568 people. In 2010, it had 713,777. Stockton and San Bernardino were not much more than small towns in 1950, with 70,853 and 63,058, respectively....

--snip-- Detroit is hardly the first city to think of having ObamaCare subsidize its retirees. Chicago, which is in financial difficulty but not bankruptcy, announced a similar plan even before Detroit. Other cities — some not even financially distressed — are contemplating doing the same thing. And why not? ObamaCare imposes no penalties on governments that offload their retirees — in contrast to large employers who offload their active employees.

“I’m proud of Detroit.” On the other end of the line was Sen. Tupac Hunter (D-Detroit), who is a member of the Mike Duggan inner circle. He was calling to remind everyone of what the senator said last week in the midst of a media story line that somehow his candidate for Mayor of Detroit could not win an uphill write-in campaign. So much for that story line. “You said you would save that tape,” he chuckled as he basked in a very impressive victory for his guy for mayor. Mr. Duggan defied the experts and finished fir - not...

After Detroit filed bankruptcy two weeks ago, the attention turned to America's other financially distraught cities. Think Motown is the only major U.S. city in a boatload of financial trouble? Think again. Detroit's bankruptcy filing sent shivers down the spine of municipal bondholders, government employees, and big-city urban residents all over the country. That's because many of the 61 largest U.S. cities are plagued with the same kinds of retirement legacy costs that sent Detroit into Chapter 9 bankruptcy this summer. These cities have amassed $118 billion in unfunded healthcare liabilities. These are legal promises to pay healthcare benefits...

Cities: Chicago appears to be following Detroit's lead to financial disaster, perhaps the latest victim of decades of one-party rule by Democrats eager to redistribute wealth while driving real wealth creators out of cities. Moody's Investors Service downgraded the Windy City's credit rating by three notches last week, partly the result of $19 billion in unfunded pension debt, leaving Chicago's lower than 90% of Moody's public finance ratings. Among the nation's five largest cities, Chicago has put aside the smallest portion of its looming pension obligations, according to a study issued this year by the Pew Charitable Trusts. The condition...

Soon after the city of Detroit filed for bankruptcy, many blogs and news sites began running "facts" about the city. One common "fact" repeated often was that "the size of the police force in Detroit has been cut by about 40 percent over the past decade." Although it makes for interesting reading, just how much the police department has been cut is not that simple to determine and is another example of the city's dysfunction. For example, the city's 2003 Comprehensive Annual Financial Report states there were 4,810 uniform police officers that year. However, the city's 2012 CAFR lists the...

Think Motown is the only major U.S. city in a boatload of financial trouble? Think again. Detroit’s bankruptcy filing sent shivers down the spine of municipal bondholders, government employees, and big-city urban residents all over the country. That’s because many of the 61 largest U.S. cities are plagued with the same kinds of retirement legacy costs that sent Detroit into Chapter 9 bankruptcy this summer. These cities have amassed $118 billion in unfunded healthcare liabilities. These are legal promises to pay healthcare benefits to municipal workers beyond the employee contributions to finance those funds. This is a giant fiscal sinkhole—and...

Detroit, you're not alone. Across the nation, cities and states are watching Detroit's largest-ever municipal bankruptcy filing with fear. Years of underfunded retirement promises to public sector workers, which helped lay Detroit low, could plunge them into a similar financial hole. A CNBC.com analysis of more than 120 of the nation's largest state and local pension plans finds they face a wide range of financial burdens as aging work forces near retirement. Thanks to a patchwork of accounting practices and rosy investment assumptions, it's not even clear just how big a financial hole many states and cities have dug for...

In conjunction with the observance of the 85th birthday of the late Martin Luther King, Jr. in January, the Michigan Coalition for Human Rights is organizing a community-wide conversation with the goal of ridding our justice system of racial and class bias. Representatives of police agencies and courts, together with clergy, interested citizens and community leaders, will be invited to address and find solutions to the troubling implications arising from the” not-guilty” verdict rendered in Florida’s People vs. Zimmerman case. The members of the jury seemed to believe they had little choice but to find Zimmerman not guilty, due to...

Detroit declared bankruptcy a few days ago. I've written, for years, about how Detroit should serve as a stark warning to Americans who believe in liberal social policies, like highly progressive taxes and expensive social safety nets. These socialist programs don't cure income inequality. They merely destroy wealth by reducing incentives for building businesses and encouraging dependency. That's why societies with lots of government spending typically have few civil institutions and a small middle class. Here's the message our politicians on both sides of the aisle seem to miss: 50 years ago, Detroit was one of the largest and wealthiest...

For the open-borders crowd, immigration is a patent medicine, able to cure whatever ails you. The latest pitch is that requiring immigrants to live in Detroit is the solution to that city's many ills -- see here and here, for instance. The second link, from National Journal, is aptly titled "A Modest Proposal", because it's no more real than Jonathan Swift's 18th century essay by the same name calling for the Irish to escape poverty by selling their children as food to the rich. The problem is that the Detroit suggestions do not seem to be intended as satire. And...

Downtown Detroit’s housing market was hit hard by the recession, as well the collapse of manufacturing and the long-term exodus of people. Currently one of the nation’s worst housing markets, the prices of homes have plummeted, while foreclosures continue to skyrocket. While the city is struggling to recover, China’s real estate-hungry buyers see an investment opportunity. While many people in the United States aren’t looking to purchase homes, a new craze has hit Chinese investors hoping to cash in on Detroit’s woeful housing economy. After announcing that the city filed for bankruptcy on July 18, Detroit property has been a...

Chicago — Having just been downgraded three notches by Moody’s, Chicago is suddenly hearing the uncomfortable shifting of deck chairs, as people wonder if the nation’s third-largest city is about to slam into the same debt-and-pensions iceberg that sank the SS Detroit last month. It was once inconceivable that the Motor City would become the setting for post-apocalyptic visions of burned out, abandoned neighborhoods, a corrupt and incarcerated city government, and all-but-nonexistent public services. Yet Detroit’s collapse took but a few decades. Now, the same disbelief and denial about Chicago is being heard, yet the evidence for the inescapable bill...

Detroit, you're not alone. Across the nation, cities and states are watching Detroit's largest-ever municipal bankruptcy filing with great trepidation. Years of underfunded retirement promises to public sector workers, which helped lay Detroit low, could plunge them into a similar and terrifying financial hole. A CNBC.com analysis of more than 120 of the nation's largest state and local pension plans finds they face a wide range of burdens as their aging workforces near retirement. Thanks to a patchwork of accounting practices and rosy investment assumptions, it's not even clear just how big a financial hole many states and cities have...

Detroit’s bankruptcy and the problems facing its pension funds offer two important lessons to other communities. One is that state and local governments need to do a much better job managing retirement funds. The other is that they should not pre-emptively reduce hard-earned benefits at the first sign of trouble. Several state and local pension systems around the country are under serious stress. Not surprisingly the hardest hit retirement funds are in places devastated by global economic forces like Detroit, as well as inland cities in California like Stockton, which was battered by the real estate collapse and has also...

What do northwest Washington, D.C., South Beach Miami and upper Manhattan have in common? Less than 50 years ago, the now vibrant communities didn't look much different from most of Detroit, says emergency manager Kevyn Orr—whom Gov. Rick Snyder tapped in March to revive the broken Motor City. This is what gives him hope that Detroit can stage a comeback. "D.C. in '91 was still burned out from the 1968 riots," recalls the youthful 55-year-old attorney who worked for 22 years in D.C., at the Federal Deposit Insurance Corporation, Resolution Trust Corporation, Justice Department and Jones Day law firm. "You...

Salon’s Andrew O’Hehir has fingered the main culprits behind Detroit’s bankruptcy. According to him, it’s none other than Fox News host Sean Hannity and all his fellow racist conservatives who were threatened by Smokey Robinson. In his July 27 screed for Salon headlined “Why the Right Hates Detroit” O’Hehir claimed the fall of big cities like Detroit and New Orleans had less to do with longtime Democratic rule and more to do with the right’s desire, as seen in the “coded racism of Sean Hannity” to punish the cities that spawned “the worldwide revolution symbolized by hot jazz, Smokey Robinson...

Liberals incessantly claim fealty to “science,” while falsely caricaturing libertarians and conservatives as the ones stubbornly ideological and averse to real-world facts. Scientific method, however, involves objective observation and testing beliefs against results. In that vein, it is liberals who prove habitually impervious to facts and the disastrous real-world results of their philosophies. Take gun control as one recurring example. Liberals persist in their anti-Second Amendment crusade despite irrefutable data that America’s murder rate has been cut in half over the past three decades even while gun possession has reached record highs and firearms restrictions have drastically receded across America....

**SNIP** Usually, they vote with their feet and leave. But in extreme cases like Detroit, they simply fail to pay them: Nearly half of the owners of Detroit's 305,000 properties failed to pay their tax bills last year, exacerbating a punishing cycle of declining revenues and diminished services for a city in a financial crisis, according to a Detroit News analysis of government records. ... "Why pay taxes?" asked Fred Phillips, who owes more than $2,600 on his home on an east-side block where five owners paid 2011 taxes. "Why should I send them taxes when they aren't supplying services?...

Detroit could be looking to ObamaCare for a bailout as city leaders try to cut back on retiree health costs as they enter bankruptcy proceedings. The New York Times reported Monday that the city is proposing a plan aimed at reducing its $5.7 billion in outstanding retiree health costs. In short, they want to take those retirees too young to qualify for Medicare and send them into the ObamaCare insurance markets -- which are scheduled to launch next year. Doing so would ease the burden on the Detroit coffers by taking them off city coverage. But it would inevitably increase...

Growing up in Roseville in the 1970s, by the time I reached junior high school the majority of my neighborhood friends were refugees from Detroit, those who fled at a time when the inner city was showing the earliest signs of degenerating into an urban wasteland. These suburban families represented the beginning of white flight, a massive population shift that would prove to be Detroit’s undoing over the next four decades. Once safely settled in suburbia, these whites would eventually lead the charge against cross-district busing and would congregate as an anti-Detroit voting bloc. That led to Macomb County political...

On Sunday’s “This Week with George Stephanopoulos” on ABC, Washington Post columnist George Will took on proponents of federal assistance for Detroit, which declared bankruptcy earlier this month. According to Will, the city isn’t undergoing a fiscal crisis, but is facing a much more serious cultural one, which is the source of its woes. “Can’t solve the problems because the problems are cultural,” Will said. “You have a city, 139 square miles. You can graze cattle in vast portions of it. Dangerous herds of feral dogs roam in there. You have 3 percent of fourth graders reading at the national...

Sina Finance reports that since the bankruptcy on July 18 was announced, the Chinese website Sina Weibo has been all abuzz about how properties can be picked up for a pittance. Caroline Chen, a real estate broker in Troy, Michigan, claims to have received numerous calls from people in China. Chen says that some people have called and said they want to buy 100 to 200 properties. She said that a colleague recently sold 30 properties to a Chinese buyer. The buyer said we don't need to see the properties just pick the good ones.

Michigan's Attorney General Bill Schuette, a Republican, said on Saturday he would defend retirees who risk losing public pensions because of Detroit's bankruptcy, putting him at odds with the city's emergency manager appointed by fellow Republican Governor Rick Snyder. Schuette, an elected official, said the Michigan state constitution is "crystal clear" in stating that pension plans are a contractual obligation that may not be diminished or impaired. "Retirees may face a potential financial crisis not of their own making, possibly a result of pension fund mismanagement," Schuette said in a statement. The attorney general said he would file in federal...

A lot of people have been writing about Detroit lately and why the one-time economic powerhouse is now a bankrupt echo of wasted opportunity. Most of it, coming from the usual suspects at MSNBC, is a lie designed to direct the public’s attention away from the oil – the lifeblood of the Motor City – on their ideological hands. The problems of Detroit are not so much economic one; they were caused, for the most part, by political corruption. Unlike most of those opining on television and in print, I was born in Detroit, in (the now gone) Mt. Carmel...

Selling only 38 pieces from the Detroit Institute of Art could raise $2.5 billion. By John Fund Everyone has an idea about how to handle bankrupt Detroit. Public-employee unions want a state or federal bailout. A liberal state-court judge in Lansing wants to block the bankruptcy because it might reduce government pensions — with no thought as to where the money to pay for them will come from. Supply-siders want to create “innovation zones” that would spur growth by reducing taxes and regulations in the inner city, but it would be years before that measure would have an effect.

Failure sometimes has an inertia that is difficult to stop. Detroitâ€™s reality is anything but pretty: Detroit city services are already stretched extremely thin. On average, police take about an hour to respond to calls for help, and 40% of street lights are shut off to save money. Because of a lack of funds, the police force has shrunk in size to the point that it simply canâ€™t respond in any meaningful way to help citizens who are victims of crime. As you might imagine then, crime is horrific. City services are so minimal as to almost be non-existent. Yet...

Symbolizing the dramatic decline of Motor City, many buildings and structures in the former manufacturing mecca of Detroit, Mich. lay in crumbling and weather-beaten ruins. In his bestselling book, "The World Without Us," Alan Weisman (who has reported from abandoned cities such as Chernobyl, Ukraine and Varosha, Cyprus) wrote that structures crumble as weather does unrepaired damage and other life forms create new habitats. A common structure would begin to fall apart as water eventually leaks into the roof, erodes the wood and rusts the nail, he wrote. Without intervention, many of Detroit's abandoned structures would eventually succumb to nature's...

The City of Detroit tried to file for bankruptcy last week. A state judge initially blocked the filing, but a federal judge ruled Wednesday this week that the bankruptcy case can move forward. More legal maneuvering is ahead and Detroit may well succeed in the end. After all, Detroit owes somewhere in the neighborhood of $18 to $20 billion to over 100,000 creditors. One group of creditors particularly wary of a municipal bankruptcy is Detroit’s public sector labor unions. They fear a bankruptcy judge might allow the city to cancel or reduce their pension or retiree health benefits. The unions...

Of all the depressing facts about the once great City of Detroit, this to me is the most upsetting: In 1950, there were about 296,000 manufacturing jobs in Detroit. Today, there are less than 27,000. Government -- federal, state, and local -- made this happen. I know this from experience. Government corrupted the Detroit work force. That corruption drove away my company too. Until 1984, I was a business owner in the city, employing about 20. I moved my business 60 miles away. I didn't want to leave, but I was, in effect, forced to. Many think that crime spurred...

A federal bankrutpcy judge ruled Wednesday that federal courts will decide if Detroit is eligible for bankruptcy, staying challenges to the bankruptcy in state court. Detroit's Emergency Manager Kevyn Orr—a bankruptcy expert appointed by Gov. Rick Snyder earlier this year to oversee Detroit's finances—has said the federal bankruptcy filing is necessary to get the city out from under some $18 billion in liabilities. But the city's employee unions argued the bankruptcy is an end-run around the state constitution, which protects their pension benefits. The unions backed a series of lawsuits filed in Michigan courts to block the bankruptcy. Last week,...

Listen up folks, after you read the bankruptcy filing for Detroit. 1. Right now, the City cannot meet its basic obligations to its citizens. 2. Right now, the City cannot meet its basic obligations to its creditors. 3. The failure of the City to meet its obligations to its citizens is the primary cause of its inability to meet its obligations to its creditors. 4. The only feasible path to ensuring the City will be able to meet obligations in the future is to have a successful restructuring via the bankruptcy process that recognizes the fundamental importance of ensuring the...

In the 1950s, Detroit was the fourth largest city in America, with a population of nearly 2 million. It was also a middle class paradise, with the highest median family income of all major cities in the entire country. The last Republican mayor of Detroit was elected in the 1950s. Then the 1960s happened, and Detroit became a socialist one party state. And you know what that one party was. Over the next half century, city politics in Detroit was a battle between Left and Lefter, or socialism versus communism. Let’s face reality and speak the truth. We see there...

Federal judge blocks lawsuits against Detroit’s bankruptcy Judge Steven Rhodes stopped three lawsuits threatening to undo the city’s Chapter 9 bankruptcy filing. Detroit retirees had argued that the bankruptcy could dimish their pensions. DETROIT — A federal judge agreed with Detroit on Wednesday and stopped any lawsuits challenging the city's bankruptcy, declaring his courtroom the exclusive venue for legal action in the largest filing by a local government in U.S. history. The decision by U.S. Bankruptcy Judge Steven Rhodes was a major victory for Detroit, especially after an Ingham County judge last week said that Gov. Rick Snyder ignored the...

Current vending laws state that it is illegal, even for licensed vendors, to sell on both public and private property in the most populated areas of Detroit, including Midtown, the central business district and near the stadiums. Even more surprising than the rules regarding where vendors can sell is the extremely narrow list of approved items they are allowed to sell. The ordinance governing stationary vendors, foot peddlers and street vendors states they "shall be allowed to sell only the following items from an approved location: coffee, beverages and frankfurters as approved by the department of health and wellness promotion,...

With all of the attention focused on the National Labor Relations Board these days, many people may not realize that there is another labor board that governs labor relations exclusively in the airlines and railroad industries. That labor board is the National Mediation Board (or NMB) and serves to enforce the 1926 Railway Labor Act. Right now, the NMB has its hands full with an ugly fight between unions that has just gotten uglier amid allegations of one of the unions forging signatures as three unions fight for which union(s) gets to claim $15 million per year union dues. Since...

We were going to suggest that this is the Detroit City Council’s way of pointing and yelling “squirrel,” except it wouldn’t be remotely believable because all of the squirrels moved out several years ago. Believe it or not, having just become the country’s largest municipal bankruptcy in history and with no other more pressing issues at hand, the Detroit City Council passed a resolution calling for a federal investigation of George Zimmerman. Detroit City Council passes Zimmerman investigation resolution goo.gl/fb/h56yx— 590 KZO News (@590KZONews) July 24, 2013 For many Twitter users, this only helps further explain what’s happened to...

The Deal on Detroit, Part II. Date Monday, July 22, 2013 at 01:40PM By Peter M. De Lorenzo Detroit. The headlines last week were terrible for those of us who call this region home, a kaleidoscope of every possible way to say that Detroit had run out of room and run out of time. Bankrupt. Broke. Busted. And now it’s all over but the hand-wringing and the legal wrangling for the Motor City. For those of us who live in the area, it was no surprise in the least. This city and this region have been teetering on the brink...

The Trayvon Martin speech of Barack Obama is the greatest symbol of his style of governance and the focus of his administration. Detroit became the largest city to declare bankruptcy last week, but Obama chose to stir the flames of racial division and give America a lecture on racism rather than address the factors that led to the Motor City's demise. This exemplifies how Obama perceives his office – it's more of a celebrity post than a seat of governance. There are countless examples. He preached on the necessity of Obamacare, but left the details of the law to Congress....

DETROIT (WWJ) – A new hockey arena for the Detroit Red Wings got another step closer to reality Wednesday with Michigan Strategic Fund Board approval of $450 million in bonds for the structure. State officials said the overall project, which includes a total of $650 million in arena costs and retail, residential and restaurant development around the arena on 45 acres, would create 4,380 construction jobs. The city’s bankruptcy is not expected to interfere with the project, which backers said consists of 56 percent private investment from Olympia Development and 44 percent public financing from tax capture in the Detroit...

In the city of Detroit, 60 percent of children reportedly live in poverty, 40 percent of the streetlights don't work, police take about an hour to respond to any call, it filed for bankruptcy protection last week, and, according to mayoral candidate Tom Barrow, it's all a lie. "Chess moves are thought way in advance," Barrow tells the local ABC affiliate WXYZ. Barrow was visiting the WXYZ studio to introduce himself to the public that may not know who he is, for a get-to-know-the-candidate-who-really-believes-all-of-your-city's-problems-are-entirely-made-up segment. "These are really big claims you're making...the way you're talking, these problems are all made...